By: Dividend Sensei
It’s been a rough few weeks for some popular tech stocks that dominate the Nasdaq.
Concerns over rising interest rates from an overheating economy have sent some shares crashing as much as 30% in a matter of days.
However, there are several reasons why if you let yourself be scared out of stocks right now, you’ll likely regret it for the rest of your life.
Reason 1: The Pandemic Is Almost Over
JNJ’s single-shot vaccine has now approved. The company says 4 million doses will ship in the US this week and 20 million by the end of March. 100 million by the end of June.
Here’s a timeline of how vaccinations could ramp up in the next five months:
- March 31: 240 million doses distributed
- May 31: 420 million doses distributed
- June 30: 500 million doses distributed
- July 31: 700 million doses distributed” – Business Insider
These are merely the number of doses excepted to be delivered, not actually administered.
- however, the US is expected to increase daily vaccinations to 3 million per day by the end of May
- 50K US pharmacies alone have the capacity for 3 million daily vaccinations
Expert consensus is now early to mid-July = US herd immunity and the end of the pandemic in this country.
That includes Moody’s which is assuming a July 4th herd immunity date as its base case forecast. A forecast that includes 6% GDP growth in 2021 and 5% in 2022.
- Better two-year growth than even during the tech boom 90’s.
And guess what? Economic forecasts have been rising all year. That includes blue-chip economists at Bank of America.
The US economy will experience “stellar” growth in 2021 as the COVID-19 pandemic subsides, Bank of America said in a note on Monday…
The bank increased its 2021 US GDP growth estimate to 6.5% from 6.0% as it has become “more convinced” that the consumer will get out and spend this year, the note said. The bank also sees heightened economic growth extending into next year, bumping its 2022 GDP growth estimate to 5.0% from 4.5%…
“Vaccinations are running at a faster-than-expected-rate, which should pull forward the timeline for successful reopening of the economy. This will help to unleash demand for leisure and other COVID-sensitive services even earlier than previously anticipated,” BofA said. ” – Business Insider
Why is BAC even more optimistic than Moody’s about 2021 and 2022 growth?
- $1.7 trillion stimulus vs $1 trillion assumptions
And we can’t forget that the other major stimulus package this year, infrastructure might be even bigger and generate decades of economic growth.
This brings us to the second major reason if you sit out the next few years, you might never forgive yourself.